tag:blogger.com,1999:blog-3816548514220649512017-09-26T09:06:11.541-04:00Daily Business ReportDAILY BUSINESS REPORT - Financial Updates, International Markets and Business NewsSARTREhttp://www.blogger.com/profile/04079449084141937603noreply@blogger.comBlogger1519125tag:blogger.com,1999:blog-381654851422064951.post-3293870699959370082017-09-26T09:06:00.000-04:002017-09-26T09:06:11.584-04:00As Cash Use Plummets, Swedish Government Begins Testing Cryptocurrencies<span style="font-family: Arial, Helvetica, sans-serif;"><b>Riksbank estimates that cash transactions made up only 15 percent of all retail transactions last year.</b> That number is down from 40 percent in 2010, thanks in large part to massively popular mobile payment services. <b>That leaves the bank wondering if a technology similar to that of Bitcoin’s could be implemented in Sweden.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Riksbank isn’t the only central bank taking a serious look at blockchain, the technology that makes Bitcoin and other cryptocurrencies run.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">These systems, also called distributed ledgers, rely on networks of computers, rather than a central authority like a bank, to verify and record transactions on a shared, virtually incorruptible database.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;"><b>Government bankers across the world believe this has the potential to replace cash and make other payment systems more efficient.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-25/cash-use-plummets-swedish-government-begins-testing-cryptocurrencies"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-13083735994628900642017-09-25T09:42:00.000-04:002017-09-25T09:42:08.521-04:00China's ICO Crackdown Boosts Hong Kong's Hopes Of Becoming Blockchain Hub<span style="font-family: Arial, Helvetica, sans-serif;"><b>China’s decision to shutter digital-currency exchanges based on the mainland</b>, a strategy meant to extinguish the rampant fraud and abuse associated with initial coin offerings, or ICOs, <b>is brightening Hong Kong's hopes of asserting itself as a hub for blockchain technology</b>.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">As <a href="https://www.bloomberg.com/news/articles/2017-09-24/crypto-mania-grips-hong-kong-as-city-looks-for-life-beyond-banks">Bloomberg</a> reports, while China has at least nominally embraced blockchain technology - even building a prototype digital yuan – Hong Kong’s city government has gone a step further by encouraging blockchain startups to set up shop in the city. One firm run by Johnson Leung, who has found success in finance and shipping, and now runs a blockchain startup, is focusing on applications for container ship operators.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">The city’s embrace of blockchain is its latest attempt to nurture a domestic technology industry that could compliment the city’s dominance in banking and shipping. But as Bloomberg notes, betting on blockchain, a technology that has generated a ludicrous amount of hype, much of it undeserved, could be a risky proposition. Despite Hong Kong’s status as a financial hub, the city, one of the most expensive in the world for average working families, has zero “unicorns” – a term for startups valued at over $1 billion.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Skeptics say it’s a risky bet on an unproven technology - one with more than its fair share of hype and, in some cases, fraud. But a growing number of Hong Kong entrepreneurs and policy makers are convinced the online ledger system that underlies cryptocurrencies like bitcoin will eventually reshape everything from financial services to supply chains. They say the city’s laissez faire approach toward regulation, along with its expertise in finance and logistics, make it a natural hub for blockchain startups.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">“<b>I don’t see why Hong Kong can’t be a leader of blockchain technology</b>,” said Leung, who co-founded 300cubits.tech after more than a decade in the financial industry that included stints as a research analyst at JPMorgan Chase &amp; Co. and Jefferies Group LLC. “<b>It’s so new that it’s not like any country has a huge advantage compared to us</b>.”</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-24/chinas-ico-crackdown-boosts-hong-kongs-hopes-becoming-blockchain-hub"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-75897139794834188682017-09-22T09:41:00.000-04:002017-09-22T09:41:15.750-04:00"You're Going To See A Rush For Gold" - Katusa Warns De-Dollarization Is Accelerating<span style="font-family: Arial, Helvetica, sans-serif;"><i>Global strategist <a href="https://katusaresearch.com/">Marin Katusa</a> is the New York Times best selling author of The Colder War, which details the geo-political power shift that threatens the global dominance of the United States. He’s also a well known resource hedge fund manager who legendary investor Doug Casey has called one of the best market analysts he’s ever worked with.</i></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">His prior forecasts noted that <b>countries around the world would soon stop trading commodities like oil in the U.S. dollar, something we’re already seeing with China, Russia, Iran, and Venezuela, all of which are preparing non-dollar, gold-backed mechanisms of exchange.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">This trend, according to Katusa in a must see interview with <a href="http://www.futuremoneytrends.com/">Future Money Trends</a>, will only continue to weaken the U.S. dollar going forward and the result will be a massive capital flight to gold in coming years:</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">I think we’ll have a near term bounce on the U.S. dollar… then it’s going to be very weak… and then it’s going to go much, much lower… With China and Russia working together to de-dollarize the U.S. dollar starting with oil, which is the biggest market… and then all the other commodities.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;"><u><b>You’re going to start seeing a massive unwind of these U.S. dollars in the emerging markets.</b></u></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-21/youre-going-see-rush-gold-katusa-warns-de-dollarization-accelerating"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-65969532937885291812017-09-21T09:49:00.000-04:002017-09-21T09:49:12.468-04:00S&P Downgrades China To A+ From AA- Due To Soaring Debt Growth<span style="font-family: Arial, Helvetica, sans-serif;">Four months after Moody's downgraded China to A1 from Aa3, unwittingly launching a startling surge in the Yuan as Beijing set forth to "prove" just how stable China truly is, moments ago S&amp;P followed suit when the rating agency also downgraded China from AA- to A+ for the first time since 1999 citing risks from soaring debt growth, less than a month before the most congress for Chiina's communist leadership in the past five years is set to take place. In addition to cutting the sovereign rating by one notch, S&amp;P analysts also lowered their rating on three foreign banks that primarily operate in China, saying HSBC China, Hang Seng China and DBS Bank China Ltd. are unlikely to avoid default should the nation default on its sovereign debt. Following the downgrade, S&amp;P revised its outlook to stable from negative.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">“China’s prolonged period of strong credit growth has increased its economic and financial risks,” S&amp;P said. “Since 2009, claims by depository institutions on the resident nongovernment sector have increased rapidly. The increases have often been above the rate of income growth. &nbsp;Although this credit growth had contributed to strong real GDP growth and higher asset prices, we believe it has also diminished financial stability to &nbsp;some extent."</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">According to commentators, the second downgrade of China this year represents ebbing international confidence China can strike a balance between maintaining economic growth and cleaning up its financial sector, Bloomberg reported. The move may also be uncomfortable for Communist Party officials, who are just weeks away from their twice-a-decade leadership reshuffle.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">The cut will “have a relatively big impact on Chinese enterprises since corporate ratings can’t be higher than the sovereign rating,” said Xia Le, an economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong. “It will affect corporate financing.”</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-21/sp-downgrades-china-aa-due-soaring-debt-growth"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-56829311211665921202017-09-20T09:37:00.000-04:002017-09-20T09:37:12.523-04:00Do You Trust What JP Morgan CEO Says About Bitcoin?<span style="font-family: Arial, Helvetica, sans-serif;">JP Morgan CEO Jamie Dimon commented that he thinks Bitcoin is a fraud, and that “it will eventually be closed.”</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">CNBC continues its amazing economic news coverage with his interview.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Yes, the CEO of a major financial institution thinks Bitcoin will be “closed.”</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Look, however unlikely, it is possible that the Bitcoin price goes to $0. It is not, however, anywhere within the realm of possibilities that the crypto-currency will be “closed” as Dimon put it.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">This is because there is nothing to close. It is not a business. It is not owned by anyone except a vast and disunited network of Bitcoin miners and those who own Bitcoins.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">So again, miners could conceivably shut off their computers. People who hold Bitcoin could conceivably sell off at such a rate that the price crumbles. But no one can “close” the cryptocurrency.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">If you listen to his complete remarks, what he seems to mean is that governments will crack down on Bitcoin when it becomes too popular.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.thedailybell.com/news-analysis/do-you-trust-what-jp-morgan-ceo-says-about-bitcoin/"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-4101290943674146142017-09-19T09:35:00.000-04:002017-09-19T09:35:12.032-04:00Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us<span style="font-family: Arial, Helvetica, sans-serif;">Will there be a major stock market crash before the end of 2017? &nbsp;To many of us, it seems like we have been waiting for this ridiculous stock market bubble to burst for a very long time. &nbsp;The experts have been warning us <a href="http://theeconomiccollapseblog.com/archives/goldman-sachs-says-that-there-is-a-99-percent-chance-that-stock-prices-will-not-keep-going-up-like-this">over</a> and <a href="http://theeconomiccollapseblog.com/archives/a-mystery-investor-has-made-a-262-million-dollar-bet-that-the-stock-market-will-crash-by-october">over again</a> that stocks cannot keep going up like this indefinitely, and yet this market has seemed absolutely determined to defy the laws of economics. &nbsp;But most people don’t remember that we went through a similar thing before the financial crisis of 2008 as well. &nbsp;I recently spoke to an investor that shorted the market three years ahead of that crash. &nbsp;In the end his long-term analysis was right on the money, but his timing was just a bit off, and the same thing will be true with many of the experts this time around.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">On Monday, I was quite stunned to learn what Brad McMillan had just said about the market. &nbsp;He is considered to be one of the brightest minds in the financial world, and he <a href="https://www.cnbc.com/2017/09/18/stock-would-have-to-drop-as-much-as-40-percent-to-be-fairly-valued-advisor.html">told CNBC</a> that stocks would need to fall “somewhere between 30 and 40 percent just to get to fair value”…</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Brad McMillan — who counsels independent financial advisors representing $114 billion in assets under management — told CNBC on Monday that the stock market is way overvalued.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>“The market probably would have to drop somewhere between 30 and 40 percent to get to fair value, based on historical standards,”</b> said McMillan, chief investment officer at Massachusetts-based Commonwealth Financial Network.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">McMillan’s analysis is <a href="http://theeconomiccollapseblog.com/archives/remember-this-milestone-the-dow-jones-industrial-average-hits-22000-for-the-first-time-in-u-s-history">very similar</a> to mine. &nbsp;For a long time I have been warning that valuations would need to decline by at least 40 or 50 percent just to get back to the long-term averages.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://theeconomiccollapseblog.com/archives/top-financial-expert-warns-stocks-need-to-drop-between-30-and-40-percent-as-bankruptcy-looms-for-toys-r-us"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-55426020478649130722017-09-18T10:04:00.000-04:002017-09-18T10:04:01.802-04:00One-Tenth Of Global GDP Is Now Held In Offshore Tax Havens<span style="font-family: Arial, Helvetica, sans-serif;">Accurately measuring the scope of global wealth inequality is a notoriously difficult undertaking – a fact that was brought to light last year when the International Consortium of Investigative Journalists published the Panama Papers, exposing clients of Panamanian law firm Mossack Fonseca. As the papers revealed, Mossack Fonseca, which is only the world’s fourth-largest provider of offshore financial services, boasted a client roster stacked with some of the world’s wealthiest and most politically connected individuals. <b>The former prime minister of Iceland (who was forced from office because of the revelations), associates of Russian President Vladimir Putin, and the father of former UK Prime Minister David Cameron.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">In a first-of-its kind study from the <a href="http://www.nber.org/papers/w23805">National Bureau of Economic Research</a>, a team of economists has broken down rates of offshore wealth holdings as a percentage of GDP to identify countries with the largest, and smallest, percentages of wealth held offshore. The study’s conclusion suggests a reality that many readers probably suspected: the true scope of wealth inequality is far larger than the official statistics would suggest.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>The study found that as much as one-tenth of the world’s GDP is held in tax havens, though that percentage can vary widely from country to country.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Here's <a href="https://www.bloomberg.com/news/articles/2017-09-12/rich-people-from-these-nations-hide-the-most-offshore-wealth">Bloomberg</a>:</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">“One-tenth of the world’s GDP is held in offshore tax havens, but that share jumps to as much of 15 percent for Europe and as much as 60 percent for Gulf and some Latin American countries, new research shows.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;"><b>When it comes to total offshore wealth as a share of GDP, the United Arab Emirates, Venezuela, Saudi Arabia, Russia and Argentina lead the pack, while Germany, the U.K. and France all have above-average holdings. The U.S. is slightly below average.”</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-16/one-tenth-global-gdp-now-held-offshore-tax-havens"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-15198741961145072652017-09-15T09:55:00.000-04:002017-09-15T09:55:08.683-04:00Comparing Bitcoin, Ether, & Other Cryptos<span style="font-family: Arial, Helvetica, sans-serif;"><b>Unless you’ve been hiding under a rock, you’re probably aware that we’re in the middle of a <a href="http://www.visualcapitalist.com/unparalleled-explosion-cryptocurrencies/">cryptocurrency</a> explosion.</b> In one year, the value of all currencies increased a staggering 1,466% – and newer coins like Ethereum have even joined Bitcoin in gaining some mainstream acceptance.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">And while people like Jamie Dimon of J.P. Morgan and famed value investor Howard Marks have been extremely critical of cryptocurrencies as of late, many other investors are continuing to ride the wave. <a href="http://www.visualcapitalist.com/comparing-bitcoin-ethereum-cryptos/">As Visual Capitalist's Jeff Desjardins has noted in the past</a>, <b>the possible effects of the blockchain cannot be understated, and it could even change the backbone of how <a href="http://www.visualcapitalist.com/blockchain-backbone-stock-market/">financial markets work</a>.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">However, even with the excitement and action that comes with the space, a major problem still exists for the layman: <b>it’s really challenging to decipher the differences between </b>cryptocurrencies like Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, and Dash.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">For this reason, we worked with social trading network eToro to come up with an infographic that breaks down the major differences between these coins all in one place.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-14/comparing-bitcoin-ether-other-cryptos"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-15142781423029766312017-09-14T09:42:00.000-04:002017-09-14T09:42:03.286-04:00De-Dollarization Spikes - Venezuela Stops Accepting Dollars For Oil Payments<span style="font-family: Arial, Helvetica, sans-serif;">Apparently <a href="http://www.zerohedge.com/news/2017-09-08/venezuela-about-ditch-dollar-major-blow-us-heres-why-it-matters">confirming what President Maduro had warned</a> following the recent US sanctions, <a href="https://www.wsj.com/articles/venezuela-stops-accepting-dollars-for-oil-payments-following-u-s-sanctions-1505343161">The Wall Street Journal reports</a> that <b>Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports</b>.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://www.zerohedge.com/news/2017-09-08/venezuela-about-ditch-dollar-major-blow-us-heres-why-it-matters">As we previously noted</a>, <b>Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week.</b> According to <a href="https://www.reuters.com/article/us-venezuela-forex/venezuelas-maduro-says-will-shun-us-dollar-in-favor-of-yuan-others-idUSKCN1BJ06O">Reuters</a>,</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar</b>,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,”</b> Maduro also said.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-13/de-dollarization-spikes-venezuela-stops-accepting-dollars-oil-payments"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-46436745534037964082017-09-13T10:05:00.000-04:002017-09-13T10:05:00.892-04:00Former BIS Chief Economist Warns "More Dangers Now Than In 2007"<span style="font-family: Arial, Helvetica, sans-serif;">India’s debt problems go back a long way, and there are significant governance issues, including at state-owned banks.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">China’s debt situation isn’t a lot different to India’s, but the acceleration of loans and credit growth in China is very fast</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">It’s not just the debt level in China that is worrisome, but the speed that it’s accumulating; maybe some of these loans won’t be repaid or serviced.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">We don’t have a liquidity problem that central banks can solve - if we have too much debt, we have a debt resolution or insolvency problem and only governments can address problems like that.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">World needs more fiscal expansion, structural reforms, and also have to look closely at debt write-off some of it and maybe recapitalize financial institutions.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">We have got the mix of income that goes to capital versus labor wrong in many countries, and we need to look at that.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Central bank tightening is inevitable, but have to be careful.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-12/former-bis-chief-economist-warns-more-dangers-now-2007"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-90231235076306696492017-09-12T06:43:00.000-04:002017-09-12T06:43:26.903-04:00Debt Nightmare: Does Anyone Actually Care That Our Exploding National Debt Is Destroying Our Future?<span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;">When will America finally wake up? &nbsp;The borrower is the servant of the lender, and we now have a colossal 20 trillion dollar chain around our collective ankles. &nbsp;We have willingly enslaved ourselves, our children and our grandchildren, and yet our addiction is so insatiable that we continue to add <a href="http://theeconomiccollapseblog.com/archives/would-you-like-to-steal-128-million-dollars">more than 100 million dollars</a> to our debt load every single hour of every single day. &nbsp;The national debt is sitting at a grand total of <a href="https://treasurydirect.gov/NP/debt/current">$20,162,176,797,904.13</a> at this moment, but now that the debt ceiling has been lifted that number is expected to shoot up very rapidly toward 21 trillion dollars by the end of the year. &nbsp;The national debt had been held down by accounting tricks to keep it under the debt limit for many months, but every time this has happened before we have seen the national debt absolutely explode back to projected levels once the debt ceiling was raised.</span><br /><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;"><br /></span><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;">But very few of our “leaders” in Washington seem to care that we are in the process of committing national suicide. &nbsp;There is no possible way that we will be able to continue to be the most powerful economy on the planet if we continue down this road. &nbsp;During Obama’s eight years in the White House, we added more than 9 trillion dollars to the national debt. That certainly improved things in the short-term, because if we could go back and take 9 trillion dollars out of the economy over the past 8 years we would be in an absolutely nightmarish economic depression right now.</span><br /><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;"><br /></span><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;">But even with all of this borrowing and spending, our economy has still only grown at an average rate <a href="http://theeconomiccollapseblog.com/archives/over-the-last-10-years-the-u-s-economy-has-grown-at-exactly-the-same-rate-as-it-did-during-the-1930s">of just 1.33 percent</a> a year over the last 10 years.</span><br /><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;"><br /></span><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;">And by going into so much debt, we are literally destroying the future for our children and our grandchildren.</span><br /><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;"><br /></span><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;">What we are doing to them is beyond criminal, and people should be going to prison over this. &nbsp;But instead we just keep rewarding these Congress critters by sending the same cast of characters back to Washington over and over again.</span><br /><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;"><br /></span><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;">Are we insane?</span><br /><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;"><br /></span><a href="http://theeconomiccollapseblog.com/archives/debt-nightmare-does-anyone-actually-care-about-our-exploding-national-debt-these-days"><span style="font-family: &quot;arial&quot; , &quot;helvetica&quot; , sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-2142513227402357742017-09-11T09:51:00.000-04:002017-09-11T09:51:12.274-04:00A Matter Of "Trust": A Look Inside China's Crackdown Of Its $3 Trillion Shadow Banking Industry<span style="font-family: Arial, Helvetica, sans-serif;">Finally, even if China manages to crackdown on Shadow Banking there is another problem: as a recent report by Natixis put it perfectly, "when one [credit] door closes [in China], another one opens up." This simply means that as Beijing slams the door shut on Trust and other key shadow debt components, these will be offset by an increased usage in others such as WMPs, NBFIs, Repos, Negotiatable Certificates of Deposit, and money markets. Below are the highlights from the report:</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">As deleverage becomes a higher level objective (but sometimes conflicting) to the Chinese leadership, banks now face more restrictions from regulators. In any event, this is not the first time they find themselves in the regulatory whirlpool. From the usage of repo agreements to wealth management products (WMPs), and most recently negotiable certificate of deposits (NCDs), banks have been very creative in playing the cat and mouse game in front of evolving regulations.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">Flourishing financial innovation has helped China’s leverage process to continue unabated. The deleveraging process has hardly begun. In contrast, liquidity seems to be increasingly scarce, which keeps on lifting the cost of funding. In fact, overnight SHIBOR is at record high since the difficult events in 2015, very close to 3% (Chart 1). One of the key reasons for the liquidity shortage is related to tighter regulatory control from the People's Bank of China (PBoC), in particular stricter Macro Prudential Assessment (MPA). This has hampered the use of WMPs to fund banks’ asset growth. They have already shrunk by 1.6 RMB trillion to 28.4 RMB trillion in May 2017 (Chart 2)</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-10/matter-trust-look-inside-chinas-crackdown-its-3-trillion-shadow-banking-industry"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-30964846112287635772017-09-08T10:38:00.000-04:002017-09-08T10:38:15.548-04:00Toronto Home Price Bubble Bursts Into Bear Market<div style="margin-bottom: .0001pt; margin: 0in;"><b><i><span style="font-family: Arial, sans-serif;">With surprise rate hike, Bank of Canada turns against housing market...</span></i></b><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><br /></div><div style="margin: 0in 0in 0.0001pt;"><span style="font-family: Arial, sans-serif;">Home sales in the Greater Toronto Area, the largest housing market in Canada, plunged 34.8% in August compared to a year ago, to 6,357 homes, with sales of detached homes and semi-detached homes getting eviscerated:</span><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><br /></div><div style="margin: 0in 0in 0.0001pt;"><span style="font-family: Arial, sans-serif;">Sales by type:</span><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><br /></div><div style="margin: 0in 0in 0.0001pt;"><b><span style="font-family: Arial, sans-serif;">Detached houses -41.6%</span></b><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><b><span style="font-family: Arial, sans-serif;">Semi-detached houses -37.3%</span></b><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><b><span style="font-family: Arial, sans-serif;">Townhouses -27.5%:</span></b><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><b><span style="font-family: Arial, sans-serif;">Condos -28.0%.</span></b><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><br /></div><div style="margin: 0in 0in 0.0001pt;"><span style="font-family: Arial, sans-serif;">Even as total sales plunged, the&nbsp;<b>number of active listings of homes for sale soared 65% year-over-year</b>&nbsp;to 16,419, with 11,523 new listings added in August, according to the Toronto Real Estate Board (<a href="http://www.trebhome.com/MARKET_NEWS/release_market_updates/news2017/nr_market_watch_0817.htm">TREB</a>).</span><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><br /></div><div style="margin: 0in 0in 0.0001pt;"><span style="font-family: Arial, sans-serif;">“The relationship between sales [plunging] and listings in the marketplace today [soaring] suggests a balanced market,” the report explained, adding hopefully:</span><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><br /></div><div style="margin: 0in 0in 0.0001pt;"><b><i><span style="font-family: Arial, sans-serif;">“If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels.”</span></i></b><o:p></o:p></div><div style="margin: 0in 0in 0.0001pt;"><br /></div><div style="margin: 0in 0in 0.0001pt;"><a href="http://www.zerohedge.com/news/2017-09-07/toronto-home-price-bubble-bursts-bear-market"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;;">Read the entire article</span></a><o:p></o:p></div><br /><div class="MsoNormal"><br /></div>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-79172786516746278852017-09-07T10:36:00.000-04:002017-09-07T10:36:03.759-04:00NYC Commercial Real Estate Sales Plunge Over 50% As Owners Lever Up In The Absence Of Buyers<span style="font-family: Arial, Helvetica, sans-serif;">So what do you do when the bubbly market for your exorbitantly priced New York City commercial real estate collapses by over 50% in two years? &nbsp;<b>Well, you lever up, of course</b>.&nbsp;</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">As <a href="https://www.bloomberg.com/news/articles/2017-09-06/nyc-landlords-that-can-t-find-buyers-turn-to-borrowing-instead">Bloomberg</a> notes this morning, the 'smart money' at U.S. banking institutions are tripping over themselves to throw money at commercial real estate projects all while 'dumb money' buyers have completely dried up.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">A growing chasm between what buyers are willing to pay and what sellers think their properties are worth has put the brakes on deals. In New York City, the largest U.S. market for offices, apartments and other commercial buildings, transactions in the first half of the year tumbled about 50 percent from the same period in 2016, to $15.4 billion, the slowest start since 2012, according to research firm Real Capital Analytics Inc.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">At the same time, the market for debt on commercial properties is booming. Investors of all stripes -- from banks and insurance companies to hedge funds and private equity firms -- are plowing into real estate loans as an alternative to lower-yielding bonds. That’s giving building owners another option to cash in if their plans to sell don’t work out.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;"><b>“Sellers have a number in mind, and the market is not there right now,”</b> said Aaron Appel, a managing director at brokerage Jones Lang LaSalle Inc. who arranges commercial real estate debt. <b>“Owners are pulling out capital” by refinancing loans instead of finding buyers,</b> he said.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-06/nyc-commercial-real-estate-sales-plunge-over-50-owners-lever-absence-buyers"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-30189946911417766102017-09-06T08:48:00.000-04:002017-09-06T08:48:00.355-04:00US Bitcoin Exchange Coinbase Hits 10 Million Users<span style="font-family: Arial, Helvetica, sans-serif;">After two (and soon three) "generational" market crashes, Joe Sixpack may have lost interest in the stock market (or at least in single names, the transfer of bagholder rights from institutions to <a href="http://www.zerohedge.com/news/2017-02-25/jpmorgan-institutions-and-hedge-funds-are-using-rally-sell-retail-investors">retail investors via ETFs is doing just fine</a>), but when it comes to chasing torrid, upward price momentum, US retail investors are doing their best frenzied Chinese housewife impression now that they have discovered the next big bubble thing, and it's called bitcoin. And nowhere is America's sudden infatuation with cryptocurrencies such as bitcoin, ethereum, litecoin and all other "coins" which can make (or break) a hedge fund's annual return in days if not hours, more obvious than on Coinbase, the US bitcoin exchange, <b>which has just hit a remarkable 10 million registered users, all of whom are there for just one thing: to trade, but mostly buy, crypto currencies.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">The San Francisco startup has seen tremendous growth in 2017, adding thousands of users per day and handling increasing levels of trading volume. Last month, CEO Brian Armstrong announced that the company had raised $100 million during its latest funding round, giving the company a valuation of $1 billion, making it first “bitcoin unicorn” according to <a href="https://www.cryptocoinsnews.com/bitcoin-exchange-coinbase-hits-10-million-users/">Cryptocoinsnews</a>. A few weeks later, following the latest burst higher in bitcoin, Coinbase has surpassed 10 million registered users.<b> In the last three weeks of August, the bitcoin exchange added an astonishing 800,000 users</b> as the bitcoin price briefly rose above $5,000. According to data from the Coinbase website, the exchange and wallet service has also recently surpassed $20 billion in total volume.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">While many bitcoin veterans have panned Coinbase for its simplistic approach to trading (no limit orders, no shorting, etc) and exorbitant fees, some actually enjoy the minimialist, if expensive, experience: one user on reddit, btcltc77, referred to the exchanges as the “McDonald’s of Bitcoin banking.”</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Coinbase is still the most mainstream way of buying Bitcoin. It’s the McDonald’s of Bitcoin banking.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">That, and the implied safety net from its increasingly bigger venture backing, appears to be working and has made Coinbase the go-to site for millions of armchair cryptocurrency investors.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-05/us-bitcoin-exchange-coinbase-hits-10-million-users"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-1085591026573506612017-09-05T09:10:00.000-04:002017-09-05T09:10:00.403-04:00These cheap retail stocks can hold their own against Amazon<span style="font-family: Arial, Helvetica, sans-serif;">When it comes to consumer stocks, it's the best of times and the worst of times. &nbsp;</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">On the plus side, <a href="http://www.sca.isr.umich.edu/">consumer sentiment</a> is strong. The Conference Board's measure of consumer confidence hit a <a href="http://www.marketwatch.com/story/consumer-confidence-slips-from-16-year-high-2017-04-25">16-year high</a> a few months back, and there's little sign of a slowdown. <a href="https://www.bloomberg.com/news/articles/2017-08-15/consumers-in-driver-s-seat-for-u-s-economy-as-retail-sales-jump">July retail figures</a> released a few weeks ago were the best they've been all year.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Yet retail and consumer stocks have been toxic despite these broader metrics. The SPDR S&amp;P Retail ETF XRT, +1.35% &nbsp;, for example, is down more than 15% in the past two years vs. a 25% gain for the S&amp;P 500 SPX, +0.20% &nbsp;; this year so far the fund is down 10% vs. a 10% gain for the S&amp;P 500</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Are consumer stocks and traditional retailers dead forever? Or are they poised for a comeback as the all-important holiday shopping season kicks off?</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Unfortunately, there are no easy answers. Certain segments of specialty retail have remained resilient, while others look to be down for the count. But take a closer look at the fundamentals of these three specific companies after their recent earnings reports. Each of them a good chance of mounting a late-2017 comeback, particularly if consumer sentiment stays strong:</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.marketwatch.com/story/these-cheap-retail-stocks-can-hold-their-own-against-amazon-2017-09-05"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-35734504929432353272017-09-04T10:35:00.000-04:002017-09-04T10:35:04.513-04:00Visualizing The Unparalleled Explosion In Cryptocurrencies<span style="font-family: Arial, Helvetica, sans-serif;"><b>After the massive Bitcoin price surge in November 2013, the popularity of launching new cryptocurrencies took off along with it.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">In fact, <i><a href="http://www.visualcapitalist.com/unparalleled-explosion-cryptocurrencies/">as Visual Capitalist's Jeff Desjardins notes</a></i>, <b><i>if you go back at historical snapshots around that time, you’ll see that there were literally hundreds of new coins available to mine and buy</i></b>. Here’s one from <a href="https://coinmarketcap.com/historical/20141109/">November 2014</a> – a time when there were only 32 coins that were worth more than $1 million in market cap, and 354 coins that were worth less than $50,000, usually trading for tiny fractions of a cent.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">It seems like everyone and their dog were launching cryptocurrencies back then, even if they were a longshot to materialize into anything.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b><u>Then vs. Now</u></b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Fast forward to today, and things haven’t changed much – many people and companies are still launching new cryptocurrencies through a mechanism known as an ICO (Initial Coin Offering).</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>The only difference?</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><b><br /></b></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>Today, there is real money at play, and in 12 months the number of cryptocurrencies worth &gt;$1 million has soared by 468%. Meanwhile, the total value of all currencies together has skyrocketed by 1,466%.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-09-02/visualizing-unparalleled-explosion-cryptocurrencies"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-42547920132404553842017-09-01T09:49:00.000-04:002017-09-01T09:49:10.464-04:00Six Banks Join UBS's "Utility Coin" Blockchain Project<span style="font-family: Arial, Helvetica, sans-serif;">Here’s a piece of news that the remaining human members of Wall Street’s FX sales and trading desks probably don’t want to hear.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">According to the <a href="https://www.ft.com/content/20c10d58-8d9c-11e7-a352-e46f43c5825d">Financial Times</a>, six of the world’s largest banks have decided to join a blockchain project called “utility coin” that will allow banks to settle trades in securities denominated in different currencies without a money transfer. <b>What’s worse, the banks expect to begin live-testing the project late next year.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>“Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have teamed up to work on the “utility settlement coin” which was created by Switzerland’s UBS to make financial markets more efficient.</b></span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">The move comes as the project shifts into a new phase of development, in which its members aim to deepen discussions with central banks and to work on tightening up its data privacy and cyber security protections.”</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">The project’s managers say they’ve already involved representatives from various central banks…</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-08-31/six-banks-join-ubss-utility-coin-blockchain-project"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-30605574626767386732017-08-31T08:06:00.000-04:002017-08-31T08:06:03.453-04:00Nomi Prins: A Decade Of G7 Central Bank Collusion... And Counting<span style="font-family: Arial, Helvetica, sans-serif;"><b>Since late 2007, the Federal Reserve has embarked on grand-scale collusion with other G-7 central banks to manufacture a massive amount of money.</b> The scope and degree of this collusion are historically unprecedented and by admission of the perpetrators, unconventional in approach, and - depending on the speech - ineffective.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Central bank efforts to provide liquidity to the private banking system have been delivered amidst a plethora of grandiose phrases like “unlimited” and “by all means necessary.” <b>Central bankers have played a game with no defined goalposts, no clock rundown, no max scores, and no true end in sight.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>At the Fed’s instigation, central bankers built policy on the fly.</b> Their science experiment morphed into something even Dr. Frankenstein couldn’t have imagined. Confidence in the Fed and the U.S. dollar (as well as in other major central banks globally) has dropped considerably, even as this exercise remains in motion, and even though central bankers have tactiltly admitted that their money creation scheme was largely a bust, though not in any one official statement.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b><u>Cracks in the Facade</u></b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">On July 31, 2017, Stanley Fischer, vice chairman of the Fed, delivered a speech in Rio de Janeiro, Brazil. There, he addressed the phenomenon of low interest rates worldwide.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-08-30/nomi-prins-decade-g7-central-bank-collusion-and-counting"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-27898748889310281572017-08-30T09:45:00.000-04:002017-08-30T09:45:05.351-04:00Emerging Market Debt: Dumb, Dumber, And Dumbest<span style="font-family: Arial, Helvetica, sans-serif;">One of the classic signs that the credit cycle is nearing the end is that <b><i>borrowers that shouldn’t be getting financed not only get funded, but get it at terms that seem crazy</i></b>. I’ve recently written about the silly things happening in <a href="https://www.linkedin.com/pulse/low-returns-ahead-high-yield-debt-jonathan-rochford?lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_post_details%3BNb3gwRtAQyCKrUndn04Bhw%3D%3D">global high yield debt</a>, <a href="https://www.linkedin.com/pulse/july-market-commentary-china-time-different-jonathan-rochford?lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_post_details%3BNb3gwRtAQyCKrUndn04Bhw%3D%3D">Chinese debt</a> and the <a href="https://www.linkedin.com/pulse/austerity-isnt-dead-come-back-vengeance-jonathan-rochford?lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_post_details%3BNb3gwRtAQyCKrUndn04Bhw%3D%3D">global attitude to sovereign debt</a>. Continuing this theme are recent examples of emerging market sovereign debt; Greece, Argentina and Iraq. Each of these shouldn’t have been funded, but the desperation for yield saw all three get funded on terms that seem crazy. Here’s the detail on each.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><b><span style="font-family: Arial, Helvetica, sans-serif;">Conclusion</span></b><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">In considering emerging market debt, investors have to be careful to consider each country on its own merits. In the examples of Argentina, Greece and Iraq, bond buyers have suspended sceptical analysis. They’ve banked the equity case, hoping for a substantial change from historical precedents, even though they won’t get a share of the upside if the rosy scenario occurs.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>The examples aren’t unusual</b>; as shown in the graph below from Bloomberg <a href="https://www.bloomberg.com/news/articles/2017-08-23/mongolia-anyone-junkiest-sovereign-debt-now-pays-less-than-6">Belarus, Mongolia and Ukraine are all CCC+ rated but have bonds yielding less than 6%</a>.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>These examples point to the greater fool theory playing out in many credit markets. We’ve now reached the point in the credit cycle where further gains seem dependent upon more dumb money arriving and pushing spreads even tighter.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">How much longer can this farce continued?</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-08-29/emerging-market-debt-dumb-dumber-and-dumbest"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-39818979640796613132017-08-29T00:07:00.000-04:002017-08-29T06:08:39.400-04:00What Does the Surprise Selection of Expedia’s Dara Khosrowshahi as CEO Mean for Uber?<span style="font-family: Arial, Helvetica, sans-serif;">You could have gotten whiplash from watching Uber’s CEO selection ping pong today. First former supposed lead horse, ex GE CEO Jeff Immelt, withdrew, apparently because he’d gotten wind he wasn’t going to get the nod. Then the press briefly reported that HP’s Meg Whitman was who the board wanted….despite her having said firmly she didn’t want the job, twice. It turns out she’d come on Saturday, apparently at Benchmark’s behest, and given the board a little speech on what she thought Uber ought to do.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Not long after that, the press started reporting that the board had settled on a name that had been kept under wraps, that of Dara Khosrowshahi, currently the CEO of Expedia, who was also the highest paid CEO in 2015, pulling down a cool $94.5 million in 2015. While<a href="http://old.seattletimes.com/html/businesstechnology/2021243131_ceopay2013xml.html"> there has been some grumbling about Khosrowshahi’s rich compensation</a>, he’s never made any of the “overpaid CEO” lists. That’s because his spectacular 2015 payday was almost entirely the result of a grant of $90.8 million in stock options…for signing a long term employment agreement stipulating that he remain at the helm until September 2020. In 2016, his pay was a more staid $2.45 million.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">But Khosrowshahi is going to be Uber’s $100+ million man, since that’s going to be the order of magnitude cost of buying him out from his Expedia agreement plus whatever special inducements needed for him to join Uber (almost certainly vastly richer in expected comp if you believe that Uber will be able to do an IPO at a suitably lofty valuation, an idea we regard with considerable skepticism).</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">The press has been positive about the choice, if nothing else because Expedia has been a drama-free tech company and the financial media likes the idea of a tech CEO for Uber (arguably a necessity to keep up the fantasy that a local transportation company deserves a unicorn premium). Expedia managed to be one of two winners in what was originally a four-company fight for dominance in the travel booking business. And it also represents at least a momentary cessation of hostilities at the Uber board, since the vote on Khosrowshahi was unanimous. Recode gives some detail about his background, <a href="https://www.recode.net/2017/8/27/16212652/dara-khosrowshahi-expedia-uber-ceo">focusing on factors that may help him succeed</a>, without acknowledging the magnitude of the task.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="https://www.nakedcapitalism.com/2017/08/surprise-selection-expedias-dara-khosrowshahi-ceo-mean-uber.html"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-84059018580258917732017-08-28T09:55:00.000-04:002017-08-28T09:55:00.153-04:00On The Coming Collapse Of China's Ponzi Scheme Economy<span style="font-family: Arial, Helvetica, sans-serif;">As long as it keeps growing everything is fine. <b>When it stops growing it collapses.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">In this case you justify production with demand based purely on more production. As long as you keep pushing production up everything looks fine. At its peak in 2014 China turned out 30 times more cement than the United States, and the latest production figures are only a smidgen less than 2014’s.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>Command systems may be good at deciding where to direct economic effort in wartime but they are hopeless in peacetime at deciding when to stop and do something else.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">They just keep going down the same old track and then what you get is economic cancer, uncontrollable growth.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>You don’t see it right away. Any Ponzi scheme looks just fine as long as more people can be found to put their money in. But the end is inevitable and the longer it is delayed the more resounding the collapse.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">It has so long been delayed in the mainland that, when the end finally comes, I believe more than half of the loans and advances of the financial system will prove irrecoverable, which would be very resounding indeed.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-08-27/coming-collapse-chinas-ponzi-scheme-economy"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-54275717836664800162017-08-27T04:20:00.000-04:002017-08-27T04:20:18.783-04:00Ford To Abandon "Traditional Credit Scores" For Underwriting Decisions As Sales Stall<span style="font-family: Arial, Helvetica, sans-serif;">So, what do you do when your sales are stalling because you've already financed new cars for every man, woman and child with a credit score north of 500? &nbsp;Well, you simply abandon credit scores in the underwriting process and instead explicitly mandate that your loan officers approve every potential car buyer that walks through the door with a pulse.&nbsp;</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Maybe we're exaggerating a little, but according to a new report from the <a href="https://www.wsj.com/articles/ford-to-look-beyond-credit-scores-in-sales-push-1503653580">Wall Street Journal</a>, <b>Ford Credit "has decided to change its approval process to look beyond credit scores in an effort to pump up sales."</b> &nbsp;Which is a genius strategy if we understand it correctly.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>The company says it is looking at ways to increase loan and lease approvals for applicants with limited credit histories. These consumers are often denied credit because they lack a history of managing debt and as a result have low credit scores.</b> Ford’s credit division plans to review new data to try to determine whether these customers, as well as those with more robust borrowing histories, are likely to repay their loans.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">The move by Ford Motor's financing unit is expected to unfold in coming years, even as concerns mount about rising auto-loan losses in the industry. Ford Motor Credit is expected to announce the plans as soon as Friday.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-08-25/ford-credit-abandon-traditional-credit-scores-sales-stall-and-subprime-delinquencies"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-45711905041213561652017-08-25T09:35:00.000-04:002017-08-25T09:35:01.031-04:00What Financial Conditions Tell Us (Two Charts & A Prediction)<span style="font-family: Arial, Helvetica, sans-serif;">It seems every bank, including central banks, publishes a financial conditions index these days. <b>And because financial conditions typically lead the economy, it makes sense to track them.</b> In fact, they might contain even more information than they get credit for. They might offer the elusive “crystal ball” that foretells our economic fortunes.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Sound far-fetched? Spend a few minutes with this week’s pictures and talk, and you’ll be well equipped to judge for yourself. <b>We start with seven of our favorite indicators, shown in the table below:</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>With one exception, all of the indicators measure a separate piece of the economy’s financial side.</b> We add business earnings (the exception) because they interact closely with financial conditions. When earnings are healthy, stock prices and business credit conditions are usually healthy, too, whereas weak earnings usually weigh on stocks and credit.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Instead of melding the indicators into a single index, though, we think it’s <b>more revealing to treat them individually.</b> The chart below shows each indicator in the quarter <b>before</b> and the quarter <b>of</b> the last nine business cycle (BC) peaks, although with less data for lending standards, which the Fed began surveying for the first time in mid-1990.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-08-24/what-financial-conditions-tell-us-two-charts-prediction"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0tag:blogger.com,1999:blog-381654851422064951.post-53379295342074978292017-08-24T09:06:00.000-04:002017-08-24T09:06:02.178-04:00Japanese Bond Market Volume Collapses To Record Low<span style="font-family: Arial, Helvetica, sans-serif;">The <b>Japanese bond market remains paralyzed with trading volumes hitting record lows</b> as private bondholders no longer dare to even breathe without instructions from the central bank.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><b>Gross purchases of JGBs by investors dropped 22% to 12.6t yen ($115.1b) in July, the least since May 2016</b>, according to the latest data from Japan Securities Dealers Association Monday. <b>On a rolling 12-month average basis, the volume was at an all-time low.</b></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">The Bank of Japan’s unprecedented asset purchase program has released a <b>creeping paralysis</b> that is freezing government bond trading, constricting the yen to the tightest range on record and braking stock-market activity.&nbsp;</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">“All the markets have been quiet,” said Daisuke Uno, the Tokyo-based chief strategist at Sumitomo Mitsui Banking Corp. <b><u>“We’ve already seen the BOJ dominance of JGBs since last year, but recently participants in currency and stock markets are also decreasing as those assets have traded in narrow ranges.”</u></b>&nbsp;</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;"><b>“The flows on both the buying side and selling side continue to fall,”</b> said Takehito Yoshino, the chief fund manager at Mizuho Trust &amp; Banking Co., a unit of Japan’s third-biggest financial group by market value. “Falling volatility is a very serious problem for traders and dealers who are unable to get capital gains.”</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="http://www.zerohedge.com/news/2017-08-22/japanese-bond-market-volume-collapses-record-low"><span style="font-family: Arial, Helvetica, sans-serif;">Read the entire article</span></a>BATRhttp://www.blogger.com/profile/00489548305808337010noreply@blogger.com0